Sprouts Farmers Market, Inc.
For the period ended Sep 27, 2026. Filed Oct 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 27, 2026 · Filed Oct 28, 2026
SFM$49.10-4.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-28; filed 2026-07-29.
0001575515-26-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-27; filed 2026-10-28.
0001575515-26-000060
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 103 current paragraphs.
71 unchanged; 25 reworded; 7 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 28 previous and 28 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Selling, general and administrative expenses during the thirteen weeks ended September 27, 2026 increased $29.9 million, or 5%, compared to the thirteen weeks ended September 28, 2025. The increase was primarily due to the increased expenses of $43.9 million associated with new stores. This was partially offset by a decrease of $15.2 million in incentive compensation costs.
Current report
Results of Operations for Thirty-nine Weeks Ended September 27, 2026 and September 28, 2025
Current report
Comparison of Thirty-nine Weeks Ended September 27, 2026 to Thirty-nine Weeks Ended September 28, 2025
Current report
Net sales during the thirty-nine weeks ended September 27, 2026 totaled $7.0 billion, an increase of $302.2 million, or 5%, compared to the thirty-nine weeks ended September 28, 2025. The sales increase was driven by $403.6 million in sales from new stores, partially offset by a 1.2% decrease in comparable store sales. The decrease in comparable store sales was primarily related to a 3.4% decrease in the number of transactions, partially offset by a 2.2% increase in transaction size. The impact of the cyclospora outbreak was immaterial to the comparable store sales decrease for the thirty-nine weeks ended September 27, 2026.
Current report
Selling, general and administrative expenses during the thirty-nine weeks ended September 27, 2026 increased by $103.0 million, or 5%, compared to the thirty-nine weeks ended September 28, 2025. The increase was primarily due to increased expenses of $127.1 million associated with new stores and $8.1 million of e-commerce fees in relation to higher e-commerce sales volume. This was partially offset by a decrease of $36.1 million in incentive compensation costs.
Current report
Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $130.0 million for the thirty-nine weeks ended September 27, 2026, compared to $110.6 million for the thirty-nine weeks ended September 28, 2025. The increase was primarily driven by $10.0 million of depreciation and amortization associated with leasehold improvements and equipment for new store openings.
Current report
Total interest expense, net of $1.4 million for the thirty-nine weeks ended September 27, 2026 changed compared to total interest income, net of ($2.0) million for the thirty-nine weeks ended September 28, 2025, primarily due to lower interest rates and invested cash as well as the increase in finance lease obligations. See Note 4, “Long-Term Debt and Other Finance Obligations” of our unaudited consolidated financial statements.
Removed paragraphs (8)
Previous report
Selling, general and administrative expenses during the thirteen weeks ended June 28, 2026 increased $37.5 million, or 6%, compared to the thirteen weeks ended June 29, 2025. The increase was primarily due to the increase in new stores opened since the comparable period last year. As a percentage of net sales, selling, general and administrative expenses increased slightly, primarily due to lower comparable store sales and investments in the business made during the period. This was partially offset by cost control initiatives and operating expense management.
Previous report
Results of Operations for Twenty-six Weeks Ended June 28, 2026 and June 29, 2025
Previous report
Comparison of Twenty-six Weeks Ended June 28, 2026 to Twenty-six Weeks Ended June 29, 2025
Previous report
Net sales during the twenty-six weeks ended June 28, 2026 totaled $4.7 billion, an increase of $197.9 million, or 4%, compared to the twenty-six weeks ended June 29, 2025. The sales increase was primarily due to new stores opened in the last twelve months, partially offset by a 1.4% decrease in comparable store sales. Comparable stores contributed approximately 93% of total sales for the twenty-six weeks ended June 28, 2026 and June 29, 2025.
Previous report
Selling, general and administrative expenses during the twenty-six weeks ended June 28, 2026 increased by $73.1 million, or 6%, compared to the twenty-six weeks ended June 29, 2025. The increase was primarily driven by the increase in new stores opened since the prior year period. As a percentage of net sales, selling, general and administrative expenses increased slightly, primarily due to lower comparable store sales during the period, while fixed cost components, including payroll and occupancy expenses, remained relatively consistent.
Previous report
Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $85.1 million for the twenty-six weeks ended June 28, 2026, compared to $71.7 million for the twenty-six weeks ended
Previous report
June 29, 2025. Depreciation and amortization expenses (exclusive of depreciation included in cost of sales) primarily consist of depreciation and amortization for buildings, store leasehold improvements, and equipment for new stores.
Previous report
Interest expense/(income), net decreased to $(0.1) million for the twenty-six weeks ended June 28, 2026, compared to $(1.4) million for the twenty-six weeks ended June 29, 2025 primarily due to lower average debt outstanding and higher interest income earned as a result of higher interest rates. See Note 4, “Long-Term Debt and Other Finance Obligations” of our unaudited consolidated financial statements.
Reworded paragraphs (25)
Previous wording
Sprouts Farmers Market offers a unique specialty grocery experience featuring an open layout with fresh produce at the heart of the store. Sprouts inspires wellness naturally with a carefully curated assortment of better-for-you products paired with purpose-driven people. We continue to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. From our founding in 2002, we have grown rapidly, significantly increasing our sales, store count and profitability. Headquartered in Phoenix with 490 stores in 25 statesas of June 28, 2026, we are one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States.
Current wording
Sprouts Farmers Market offers a unique specialty grocery experience featuring an open layout with fresh produce at the heart of the store. Sprouts inspires wellness naturally with a carefully curated assortment of better-for-you products paired with purpose-driven people. We continue to bring the latest in wholesome, innovative products made with lifestyle-friendly ingredients such as organic, plant-based and gluten-free. From our founding in 2002, we have grown rapidly, significantly increasing our sales, store count and profitability. Headquartered in Phoenix with 504 stores in 25 statesas of September 27, 2026, we are one of the largest and fastest growing specialty retailers of fresh, natural and organic food in the United States.
Previous wording
•Market Expansion. We are delivering unique smaller stores with expectations of stronger returns, while maintaining the approachable, fresh-focused farmer’s market heritage Sprouts is known for. From 2021 through June 28, 2026, we have opened 125 new stores and remodeled one store featuring our updated format. Our geographic store expansion and new store placement will intersect where our target customers live, in markets with growth potential and supply chain support, which we believe will provide a long runway of approximately 10% annual unit growth.
Current wording
•Market Expansion. We are delivering unique smaller stores with expectations of stronger returns, while maintaining the approachable, fresh-focused farmer’s market heritage Sprouts is known for. From 2021 through September 27, 2026, we have opened 140 new stores and remodeled one store featuring our updated format. Our geographic store expansion and new store placement will intersect where our target customers live, in markets with growth potential and supply chain support, which we believe will provide a long runway of approximately 10% annual unit growth.
Previous wording
The twenty-six weeks ended June 28, 2026 were characterized by an uneven macroeconomic backdrop, with customers continuing to make thoughtful choices around their healthy grocery spend amid cost pressures. We are taking action to address these challenges through our initiatives in affordability, innovation, personalization, marketing, and supply chain as we continue executing our long-term growth strategy.
Current wording
The thirteen weeks ended September 27, 2026 were characterized by headwinds from the disruption caused by the cyclospora outbreak, which negatively impacted a number of our produce categories, as well as an uneven macroeconomic backdrop, resulting in lower traffic and more measured spending among our customers. We are addressing these challenges through our initiatives in affordability, innovation, personalization, marketing, and supply chain as we continue executing our long-term growth strategy. In the fourth quarter of fiscal 2026 and into fiscal 2027, we expect to increase and accelerate investments in affordability, including broader and deeper price investments, as well as investments in technology and supply chain. We will continue to assess customer response and may adjust the scale and pace of these investments accordingly. We expect these investments, together with lower comparable store sales, to pressure our margins in the near term.
Previous wording
Net sales during the thirteen weeks ended June 28, 2026 totaled $2.3 billion, an increase of $105.2 million, or 5%, compared to the thirteen weeks ended June 29, 2025. The sales increase was driven by sales from new stores opened in the last twelve months, partially offset by a 1.0% decrease in comparable store sales. Comparable stores contributed approximately 93% of total sales for the thirteen weeks ended June 28, 2026 and June 29, 2025.
Current wording
Net sales during the thirteen weeks ended September 27, 2026 totaled $2.3 billion, an increase of $104.3 million, or 5%, compared to the thirteen weeks ended September 28, 2025. The sales increase was primarily driven by $128.8 million in sales from new stores, partially offset by a 0.9% decrease in comparable store sales. The decrease in comparable store sales was primarily related to a 3.3% decrease in the number of transactions partially offset by a 2.5% increase in transaction size. Included in the comparable store sales decrease was a 0.6% negative impact from the cyclospora outbreak.
Previous wording
Gross profit totaled $900.6 million during the thirteen weeks ended June 28, 2026, an increase of $38.0 million, or 4%, compared to the thirteen weeks ended June 29, 2025, driven by increased sales volume from new stores. Gross margin decreased by 0.1% to 38.7% for the thirteen weeks ended June 28, 2026, compared to 38.8% for the thirteen weeks ended June 29, 2025, primarily driven by the impact from our loyalty program and elevated fuel costs. This was partially offset by benefits from self-distribution and vendor participation.
Current wording
Gross profit totaled $880.8 million during the thirteen weeks ended September 27, 2026, an increase of $29.7 million, or 3%, compared to the thirteen weeks ended September 28, 2025, primarily driven by $47.3 million due to increased sales volume from new stores, partially offset by lower comparable store sales. Gross margin decreased by 0.5% to 38.2% for the thirteen weeks ended September 27, 2026, compared to 38.7% for the thirteen weeks ended September 28, 2025, primarily driven by increased shrink of approximately 0.4% of sales as a result of softer comparable store sales performance and higher fuel costs of approximately 0.1% of sales.
Previous wording
Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $43.1 million for the thirteen weeks ended June 28, 2026, compared to $36.6 million for the thirteen weeks ended June 29, 2025. Depreciation and amortization expense primarily consists of depreciation and amortization for buildings, store leasehold improvements, and equipment for new stores.
Current wording
Depreciation and amortization expense (exclusive of depreciation included in cost of sales) was $44.9 million for the thirteen weeks ended September 27, 2026, compared to $38.9 million for the thirteen weeks ended September 28, 2025. The increase was primarily driven by $3.3 million of depreciation and amortization associated with leasehold improvements and equipment for new store openings.
Previous wording
Store closure and other costs, net
Current wording
Store closure and other costs/(credits), net
Previous wording
Store closure and other costs, net decreased $0.8 million to $0.8 million for the thirteen weeks ended June 28, 2026, compared to $1.5 million for the thirteen weeks ended June 29, 2025. Store closure and other costs, net primarily consist of ongoing occupancy costs associated with our closed store locations as well as one-time costs associated with disaster recovery activity.
Current wording
Store closure and other costs/(credits), net decreased $1.6 million to ($0.2) million for the thirteen weeks ended September 27, 2026, compared to $1.5 million for the thirteen weeks ended September 28, 2025. Store closure and other costs/(credits), net primarily consist of ongoing occupancy costs, including sublease income, associated with our closed store locations as well as one-time costs associated with disaster recovery activity.
Previous wording
The change to interest expense/(income), net for the thirteen weeks ended June 28, 2026 compared to interest expense/(income), net in the thirteen weeks ended June 29, 2025 was primarily due to lower interest rates and invested cash. See Note 4, “Long-Term Debt and Other Finance Obligations” of our unaudited consolidated financial statements.
Current wording
Total interest expense, net of $1.4 million for the thirteen weeks ended September 27, 2026 changed compared to total interest income, net of ($0.7) million for the thirteen weeks ended September 28, 2025 primarily due to lower interest rates and invested cash as well as the increase in finance lease obligations. See Note 4, “Long-Term Debt and Other Finance Obligations” of our unaudited consolidated financial statements.
Previous wording
The effective tax rate increased to 25.8% for the thirteen weeks ended June 28, 2026 from 25.6% for the thirteen weeks ended June 29, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for share-based compensation and amended return true up in the prior year quarter, partially offset by a decrease in non-deductible executive compensation.
Current wording
The effective tax rate increased to 25.1% for the thirteen weeks ended September 27, 2026 from 24.0% for the thirteen weeks ended September 28, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for transferable tax credits, a reduction in the benefit for federal credits, and a reduction in the benefit for share-based compensation, partially offset by a decrease in non-deductible executive compensation.
Previous wording
Net income decreased $4.5 million primarily due to decreased comparable store sales and higher selling, general and administrative expenses for the reasons discussed above.
Current wording
Net income decreased $6.7 million, primarily due to decreased comparable store sales and for the reasons discussed above.
Previous wording
The increase in diluted earnings per share of $0.02 was driven by fewer outstanding shares largely due to share repurchase activity during the thirteen weeks ended June 28, 2026 under our share repurchase program.
Current wording
The decrease in diluted earnings per share of $0.01 was primarily driven by lower net income, partially offset by fewer outstanding shares, largely due to share repurchase activity during the thirteen weeks ended September 27, 2026 under our share repurchase program.
Previous wording
Gross profit totaled $1.8 billion during the twenty-six weeks ended June 28, 2026, an increase of $69.0 million, or 4%, compared to the twenty-six weeks ended June 29, 2025, driven by increased sales volume from new stores. Gross margin decreased to 39.1% for the twenty-six weeks ended June 28, 2026, compared to 39.2% for the twenty-six weeks ended June 29, 2025, primarily driven by the impact from our loyalty program and elevated fuel costs. This was partially offset by benefits from self-distribution and vendor participation.
Current wording
Gross profit totaled $2.7 billion during the thirty-nine weeks ended September 27, 2026, an increase of $98.7 million, or 4%, compared to the thirty-nine weeks ended September 28, 2025, driven by $145.7 million due to increased sales volume from new stores, partially offset by lower comparable store sales. Gross margin decreased to 38.8% for the thirty-nine weeks ended September 27, 2026, compared to 39.1% for the thirty-nine weeks ended September 28, 2025, primarily driven by a 0.3% increase in shrink as a percentage of sales, resulting from softer comparable store sales performance.
Previous wording
Store closure and other costs, net for the twenty-six weeks ended June 28, 2026 decreased $1.3 million to $1.9 million, compared to $3.2 million for the twenty-six weeks ended June 29, 2025. Store closure and other costs, net primarily consists of ongoing occupancy costs associated with our closed store locations as well as one-time costs associated with disaster recovery activity.
Current wording
Store closure and other costs, net for the thirty-nine weeks ended September 27, 2026 decreased $2.9 million to $1.8 million, compared to $4.7 million for the thirty-nine weeks ended September 28, 2025. Store closure and other costs, net primarily consist of ongoing occupancy costs, including sublease income, associated with our closed store locations as well as one-time costs associated with disaster recovery activity.
Previous wording
The table below provides the updated requirements of ASU no. 2023-09 for the twenty-six weeks ended June 28, 2026.
Current wording
The table below provides the updated requirements of ASU no. 2023-09 for the thirty-nine weeks ended September 27, 2026.
Previous wording
The effective tax rate increased to 24.8% for the twenty-six weeks ended June 28, 2026 from 22.9% for the twenty-six weeks ended June 29, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for share-based compensation in the current year partially offset by a decrease in non-deductible executive compensation.
Current wording
The effective tax rate increased to 24.9% for the thirty-nine weeks ended September 27, 2026 from 23.2% for the thirty-nine weeks ended September 28, 2025. The increase in the effective tax rate was primarily driven by a reduction in the benefit for share-based compensation, a reduction in the benefit for transferable tax credits, and a reduction in the benefit for federal credits partially offset by a decrease in non-deductible executive compensation.
Previous wording
Net income decreased $20.8 million primarily due to decreased comparable store sales and higher selling, general and administrative expenses for the reasons discussed above.
Current wording
Net income decreased $27.5 million primarily due to decreased comparable store sales and the reasons discussed above.
Previous wording
The decrease in diluted earnings per share of $0.08 was driven by lower net income, partially offset by fewer outstanding shares largely due to our share repurchase program.
Current wording
The decrease in diluted earnings per share of $0.08 was primarily driven by lower net income, partially offset by fewer outstanding shares, largely due to our share repurchase program.
Previous wording
Cash flows from operating activities decreased by $41.3 million to $369.0 million for the twenty-six weeks ended June 28, 2026 compared to $410.3 million for the twenty-six weeks ended June 29, 2025. The decrease in cash flows from operating activities was primarily a result of changes in working capital of $72.5 million partially offset by a $19.6 million decrease in payment on our operating lease liabilities, higher net income adjusted for non-cash items of $6.0 million, and a $5.5 million increase in long term liabilities.
Current wording
Cash flows from operating activities decreased by $22.4 million to $555.1 million for the thirty-nine weeks ended September 27, 2026 compared to $577.5 million for the thirty-nine weeks ended September 28, 2025. The decrease in cash flows from operating activities was primarily a result of changes in working capital of $62.6 million, partially offset by a $20.8 million decrease in payments on our operating lease liabilities, higher net income adjusted for non-cash items of $13.5 million, and a $5.7 million increase in other long-term liabilities.
Previous wording
Cash flows (used in)/provided by operating activities from changes in working capital were $(56.9) million in the twenty-six weeks ended June 28, 2026 compared to $15.6 million in the twenty-six weeks ended June 29, 2025. The $72.5 million decrease in cash flows from changes in working capital was primarily attributable to the following factors, each of which had a negative impact on working capital: (i) $59.5 million change in accounts payable and accrued liabilities primarily due to timing differences of payments for goods and services, (ii) $14.9 million change in accounts receivable driven by the timing of collections, (iii) $12.7 million change in accrued salaries and benefits primarily driven by the payout of annual corporate bonuses, and (iv) $1.9 million change in inventory largely driven by increased store count. These decreases were partially offset by a $16.4 million change in prepaid expenses primarily driven by tax expense exceeding tax payments.
Current wording
Cash flows (used in)/provided by operating activities from changes in working capital were ($39.4) million in the thirty-nine weeks ended September 27, 2026 compared to $23.2 million in the thirty-nine weeks ended September 28, 2025. The $62.6 million decrease in cash flows from changes in working capital was primarily attributable to the following factors, each of which had a negative impact on working capital: (i) a $76.6 million change in accounts payable and accrued liabilities primarily due to timing differences of payments for goods and services, (ii) a $22.1 million change in accrued salaries and benefits primarily driven by the payout of annual corporate bonuses, (iii) a $16.2 million change in accounts receivable driven by the timing of collections, and (iv) an $11.5 million change in accrued income tax. These decreases were partially offset by (i) a $43.3 million change in inventory largely due to improved inventory positioning and (ii) a $20.5 million change in prepaid expenses and other current assets primarily driven by tax expense exceeding tax payments.
Previous wording
Cash flows used in investing activities consist primarily of capital expenditures in new stores, including leasehold improvements and store equipment, capital expenditures to maintain the appearance of our stores, sales enhancing initiatives and other corporate investments as well as cash outlays for acquisitions. Cash flows used in investing activities were $189.9 million and $120.3 million, for the twenty-six weeks ended June 28, 2026 and the twenty-six weeks ended June 29, 2025, respectively.
Current wording
Cash flows used in investing activities consist primarily of capital expenditures in new stores, including leasehold improvements and store equipment, capital expenditures to maintain the appearance of our stores, sales enhancing initiatives and other corporate investments as well as cash outlays for acquisitions. Cash flows used in investing activities were $284.2 million and $176.1 million, for the thirty-nine weeks ended September 27, 2026 and the thirty-nine weeks ended September 28, 2025, respectively.
Previous wording
Cash flows used in financing activities were $213.5 million for the twenty-six weeks ended June 28, 2026 compared to $293.7 million for the twenty-six weeks ended June 29, 2025. In both periods, the cash flows used in financing activities primarily consisted of repurchases of our common stock.
Current wording
Cash flows used in financing activities were $300.6 million for the thirty-nine weeks ended September 27, 2026 compared to $343.1 million for the thirty-nine weeks ended September 28, 2025. In both periods, the cash flows used in financing activities primarily consisted of repurchases of our common stock.
Previous wording
Our board of directors from time to time authorizes share repurchase programs for our common stock. The following table outlines the share repurchase program authorized by our board, and the related repurchase activity and available authorization as of June 28, 2026:
Current wording
Our board of directors from time to time authorizes share repurchase programs for our common stock. The following table outlines the share repurchase programs authorized by our board, and the related repurchase activity and available authorization as of September 27, 2026:
Previous wording
Subsequent to June 28, 2026 and through July 27, 2026, we repurchased an additional 0.5 million shares of common stock for $40.0 million, excluding excise tax.
Current wording
Subsequent to September 27, 2026 and through October 26, 2026, we repurchased an additional 0.5 million shares of common stock for $30.0 million, excluding excise tax.
Previous wording
There have been no substantial changes to these estimates, or the policies related to them during the thirteen and twenty-six weeks ended June 28, 2026. For a full discussion of these estimates and policies, see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in Part II — Item 7 of our 2025 Form 10-K.
Current wording
There have been no substantial changes to these estimates, or the policies related to them during the thirteen and thirty-nine weeks ended September 27, 2026. For a full discussion of these estimates and policies, see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in Part II — Item 7 of our 2025 Form 10-K.